Having control over your day to day finances, having the ability to absorb a financial shock, being on track with meeting financial goals, and having the freedom to make decisions to enjoy life are the core elements of financial wellness.
There are three key elements that form a foundation of overall financial wellness.
1. Financial Literacy
Having the information and tools to make informed financial decisions. Financial literacy lets you understand basic principles and take control of your day-to-day financial decisions, which is the first element of financial wellness.
2. Financial Security
Having the capacity to deal with a financial shock, like a downturn in the economy, illness, emergency or job layoff, is the second element of financial wellness. Do you have a plan in place to comfortably manage changing circumstances or unexpected situations?
3. Financial Confidence
Are you feeling confident about your financial future? How are you preparing for retirement? Financial confidence incorporates short term financial goals such as saving for a vacation or making a major purchase. Working towards these goals brings you to the third element of financial wellness, which then allows you to carry out the final step: enjoying your life.